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The proposed takeover of Sun by Oracle will be investigated by European competition regulators.

The European Commission Competition will look at the deal, which is already facing scrutiny from the Department of Justice in the US.

The DoJ is believed to be concerned about Java licensing. Given the combined companies' share of the market for enterprise databases, this is likely to be a concern for regulators too.

A spokeswoman for the Competition Commission said: "We can confirm that the parties notified this transaction to the European Commission on 30th of July and it will now be looked at under the EU Merger Regulation. The Commission has an initial period of 25 working days to decide if it can clear the deal or if it needs to open a more in-depth investigation of 90 working days. The current deadline for a decision is 3rd September 2009."

During this period third parties, as well as the companies concerned, are invited to contribute to the Commission's thinking on this issue.

Mergers which exceed specific turnover figures both within and outside Europe must be notified to the Commission. National regulators can also refer proposed mergers to 'Steely' Neelie Kroe's Directorate General for Competition.

The news is a blow to Oracle which was hoping to get the deal done and dusted by the end of the summer, despite the DoJ investigation.